IT HAS been a mixed year for the world’s best-known brands, as reflected in Interbrand’s annual Best Global Brands ranking. The methodology employed by Interbrand takes into account the financial performance of the branded product and service, the role the brand plays in influencing customer choice and the strength the brand has to command a premium price. Not surprisingly, the best global brands on that matrix are the tech companies—Apple, Google, Amazon and Facebook—but far more revealing is the ranking of luxury brands. In 2014, Mercedes-Benz ranked the highest among luxury brands (number 10), climbing one spot since 2013, with an 8% increase in brand value. It beat out German rival BMW, which ranked at number 12, with a 7% increase in brand value. Both brands are now valued at over $34 billion. The highest-ranking non-automotive luxury goods brands remain Louis Vuitton and Gucci. As per the Interbrand study, Louis Vuitton’s brand value doubles Gucci’s, estimated at over $22 billion. Indeed, all the luxury brands that ranked in the top 100 were valued at over $4 billion, proving that luxury is becoming as important an industry as fast moving consumer goods and technology. Louis Vuitton ranked so highly because it is one of the world’s most famously counterfeited brands and it has “repositioned itself to elevate” its legendary status. It recently opened new stores in Venice and Munich, and launched a new line of handbags. Yet, Louis Vuitton was 9% down in terms of brand value, and Gucci, too, dropped in the ranking, linked to recent concerns regarding their overexposure and consumer fatigue in the marketplace. Both brands are focusing on top-tier luxury products, as opposed to ‘entry-level’ heavily-branded items that have flooded the market.
Prada proved an interesting case. Recently, its share price declined after CEO Patrizio Bertelli forecast flat growth for the remainder of the year. Yet, the company was aggressive in expanding the Prada brand and achieved a 7% increase in brand value over 2013. Prada, overall, has experienced a relatively meteoric rise on the Interbrand ranking in the past five years. In terms of ranking and brand value over the past decade, Mercedes-Benz has proven itself to be incredibly stable in terms of increasing value, unaffected by the massive influx of technology brands since 2004. It needs to keep an eye on Audi, which delivered a record 1,580 million vehicles in 2013, an increase of 8.2% on the previous year and the second consecutive year that it has globally sold more cars than Mercedes-Benz. Indeed, Audi is now the world’s number two luxury car brand in terms of sales, just behind BMW. In Europe and China, it was the top-selling premium car brand in 2013 and Audi’s brand value increased by a massive 27% in 2014, earning its place as one of the five ‘Top Risers’, which also included Facebook, Amazon, Nissan and Volkswagen.
Overall, Hermes was the fastest-rising luxury goods brand, increasing its value by 18% in 12 months. “Brand relevance to luxury customers remains strong in all geographic areas,” said Interbrand. In 2014, the company made a significant investment in talent and restructured internally in order to reinforce the brand’s positioning and values. Alongside this, Hermes expanded its distribution and production network, and launched several social media efforts in order to remain accessible to its clients. The other brand making waves is Land Rover. It made a star debut in the global rankings, as did Hugo Boss, joining the top 100 ranking for the first time. Interbrand’s Rebecca Robins says: “Since being acquired by Tata Motors in 2008, Land Rover has witnessed double-digit growth each consecutive year” and is being praised for the refining of its product with fresh styling, high-tech platforms and downsized engines. Indeed, Land Rover recently experienced the best global sales performance in its history with records set in 42 markets. The British brand has invested heavily in product creation, facility and infrastructure. The Range Rover family was refreshed from the ground up to provide ultimate luxury with maximum capability, including significant weight loss thanks to Land Rover’s investment in what is now the world’s most advanced aluminum manufacturing facility.
Hugo Boss is experiencing similar success, growing both in terms of sales and in the number of directly-owned stores, the latter of which now account for 54% of sales. “Hugo Boss was one of the strongest-performing apparel brands globally in the past year,” explains Robins. The brand is seeking to assert greater control as it is starting to run its own stores. Jason Wu’s appointment as creative director of womenswear signals both the first real ‘star designer’ for the house, alongside a more strategic courting of the lucrative women’s fashion market by a brand best known for its menswear and suiting.